The definition of trust fund is a legal entity that contains few types of assets which another group or person benefit from. People who are involved in a trust fund are the beneficiary, the grantor or donor and the trustee. Beneficiary is a person who can benefit from a trust fund. The donor is someone who creates the trust fund and the trustee is a person or another entity that manages the trust fund from the donor. A donor or grantor can have more than one trustee.

Different to greater and beneficiary, a trustee plays more role in trust fund administration. Its task can be simple or complicated based on the type of trust funds and the distribution types. A trustee will get paid for the administration work he does. Usually there will be certain amount of the trust fund’s value for the work of the trustee to pay.

There are many reasons for creating a trust fund. Not only for rich people, but also for less wealthy ones who want to ensure income providing for their children, for example. It is mostly needed estate property if you want to transfer assets to your beneficiary. Putting assets in a trust fund will also a great help to avoid estate taxes.


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